Solana has spent recent sessions under a lot of pressure, dropping to levels not seen in nearly two years. The sharp decline followed the overall market downturn, with SOL dropping well below its previous support zone.
Despite the drawdown, early signs of stabilization are emerging. Historical patterns suggest that Solana may be poised for a recovery that could eventually push the price back toward or even beyond the $100 mark.
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Solana has experienced similar situations before.
On-chain metrics indicate that Solana is highly undervalued. The ratio of market capitalization to realized value has fallen to its lowest level in about two and a half years. This measure shows that the market value of SOL is significantly below the total cost basis of the circulating tokens, reflecting widespread unrealized losses among holders.
Such situations have historically characterized late-stage corrections rather than early declines. When realized value exceeds market value by this margin, selling pressure often subsides. Investors will be less inclined to exit at a loss and will be ready for stabilization. This valuation imbalance supports the view that SOL is trading below its fair value.
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Profitability data supports this outlook. Only 21.9% of Solana addresses are currently profitable. This means that approximately 78.1% of the holders are underwater. This level of distress has historically coincided with market bottoms, as falling prices tend to attract demand from value-oriented participants.
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Previous cycles have seen profitability decline around 20% or below before a notable recovery. Reduced profit taking limits supply, while lower prices encourage accumulation. If history repeats itself, Solana could benefit from renewed interest as investors look to rebound from heavily discounted levels.
A breakout of this level is necessary for SOL price to rebound.
Solana is trading around $86 at the time of writing, above the 23.6% Fibonacci retracement. This level is often referred to as bear market support. As long as SOL remains above it, downside risks appear to be contained, increasing the likelihood of a technical rebound.
The current stabilization suggests that SOL may be forming a bottom. Recovery will likely depend on improved capital flows. The Chaikin money flow indicator is still in negative territory, but is showing an increase. The change suggests that outflows are slowing and is an early sign that selling pressure is easing.
A decisive move above $90 would put Solana on a recovery trajectory towards $100. Confirmation will come if the price flips into support at the 61.8% Fibonacci level near $105. But if the influx does not materialize, progress could be reversed. Below $81, SOL could fall further toward $75 or even $70.
